Home Prices Slide Creating Higher Market Inventory

A survey released today showed that 26% of US homeowners say that the value of their home has fallen over the last year. This number is above the previous peak of 24% that was released in a previous survey done in 1992.

According to this survey 21% of homeowners polled in September expect their home value to drop over the next year. This is up from the 18% of people that thought this in August. This is due to the rising consumer awareness of the current credit crunch.

These shrinking home values and tougher credit requirements are combating the positive impact of the half of a percent cut that Fed Chairman Ben Bernanke announced on Tuesday. Because of this borrowers are having problems refinancing out of their adjustable rate mortgages, and have been experiencing rising payments.

People that have been trying to sell their homes to avoid higher payments have been shocked with how long their house has been staying on the market. As long ago as August inventories for realtors has been increasing and spiked to 37% higher than the previous year. According to USA Today there is now an 11.4 month supply of single-family home. Which is up from 1.9 months a year ago. This number is worse for condos which the inventory has shot up 386% to a 12.3 month supply.